2024 (2) TMI 877 - HC - Customs

Validity of permitting export in violation of notification - Supply of non-basmati Indian white rice - prohibited goods or not - challenge to notification bearing No. 20/2023, dated 20.07.2023. Petitioner took a stand that if the petitioner was not permitted to export the quantity of the aforesaid rice as per the contracts entered into by it, it would attract heavy damages by foreign buyers and result in huge financial loss to the petitioner. HELD THAT - From the record, it can be seen that while in some writ petitions, Courts had permitted as an interim measure the export of rice, which was stored in the godowns of such petitioners, yet by virtue of the judgment and order impugned in the present Appeal, the learned single Judge appears to have permitted the export of the entire quantity of 18,900 MTs of the said rice which was otherwise a subject matter of contract between the petitioner and the foreign buyers, which, runs contrary to the notification, which was impugned in the writ petition, on which a view had to be expressed and the notification impugned had to be either upheld or set aside, which did not happen in the present case, in view of the fact that after obtaining the interim relief, the petitioner very conveniently sought to withdraw the challenge to the notification itself, which was impermissible. Matter remanded to the learned single Judge for consideration afresh along with the batch of petitions which are stated to be listed tomorrow i.e., on 16.02.2024, before the concerned Bench as per the roster. Registry to post the matter accordingly. Appeal disposed off.

Summary

Issues Involved:
The judgment involves the challenge against a notification banning the export of non-basmati white rice, the retrospective effect of the restrictions, the doctrine of legitimate expectation, and the permissibility of exporting rice in violation of the notification.

Challenge Against Notification:
The petitioner, a company engaged in rice export, entered into contracts with foreign buyers for supplying non-basmati Indian white rice. A notification was issued banning the export of such rice, leading to the petitioner seeking permission to export the rice covered under the contracts. The single Judge observed that the restrictions operated retrospectively, impeding traders from fulfilling their obligations, and modified the interim order to allow the export of 18,900 MTs of rice in line with the concluded contracts.

Doctrine of Legitimate Expectation:
The learned single Judge found that the restrictions in the notification violated the doctrine of legitimate expectation as they prevented traders from honoring their obligations. The court held that such restrictions were impermissible, leading to the modification of the interim order to permit the export of the rice covered under the contracts entered into before the issuance of the impugned notification.

Permissibility of Exporting Contrary to Notification:
The appellant argued that the single Judge erred in permitting the export of rice in violation of the impugned notification without quashing it. It was contended that allowing the export of rice not falling under the conditions of the notification went against the government's policy of safeguarding food security and controlling prices. The Court noted that the single Judge's decision to permit the export of the entire quantity of rice covered by the contracts contradicted the purpose of challenging the notification, which was not addressed due to the petitioner withdrawing the challenge after obtaining interim relief.

Decision and Remand:
The High Court set aside the impugned judgment and remanded the matter for fresh consideration along with other related petitions. The Court emphasized the need to address the validity of the notification and upheld or set it aside accordingly. The case was disposed of with no order as to costs, and pending applications were closed.